Property prices in Paraguay are among the lowest in South America but buyers must be cautious.

Paraguay's corrupt legal system hinders the effective protection of property rights. There is no coherent national property survey or land register.

Due to lack of jobs in the countryside and the commercialization of agriculture, peasant groups staged a series of land invasions in 2004. These occupations often resulted in the expropriation of owners' estates. The government subsequently validated peasant ownership. Theoretically the original owners should have been compensated, but this has rarely been done.

There are no restrictions on the ownership of property by foreigners. They may also engage in commerce or industry without limitation.

Even after the end of president Alfredo Stroessner’s 35 year reign, his party, the National Republican Association-Colorado Party, continues to rule.

However, factional splits caused the assassination of a vice-president and the resignation of the president in 1999. The same year, Senate President Luis Gonzalez Maachi was appointed caretaker president.

An attempted coup against Maachi’s government was foiled in 2000. In 2002, he declared a state of emergency due to violent street protests. In 2002, he survived an impeachment attempt over charges which include corruption. After his term, Maachi was put on trial on corruption charges and barred from leaving the country.

In August 2003, a new administration was inaugurated under President Nicanor Duarte Frutos, who has proposed major economic and political changes. His tasks are daunting.

Annual GDP growth from 1996 to 2002 was only 0.18%, with economic contractions experienced in 1999, 2000 and 2002. GDP growth for 2005 was 3%. Real GDP per capita in 2005 at US$1,255, or still 12% below its 1981 level.

Paraguay is a full member of the MERCOSUR together with Argentina, Brazil and Uruguay, the largest commercial area in South America.

About 33% of the population lives below the poverty line. Inequality is among the most extreme in the world. Corruption is a fact of life. Paraguay has become a regional center for smuggling, money-laundering and organized crime.

Low official transaction costs

Moderate rental income tax

Low yields in Asuncion

Unstable political situation

Inefficient, pro-tenant courts

Insecure property rights

RESIDENTIAL PROPERTY FACTS

Price (sq.m):
n.a. For a 120 sq. m. property, usually an apartment.

Rental Yield:
n.a. For a 120 sq. m. property, usually an apartment.

Rent/month:
n.a. For a 120 sq. m. property.

Income Tax:
15.00% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.

Roundtrip Cost:
7.51% The total cost of buying and then reselling an apartment. Includes: